December 4, 2024, Newsletter

Dear Friends,

Tangents: Rockefeller Center Christmas Tree Lighting today.
December 4, 771: Charlemagne becomes ruler of the Frankish Kingdom following his brother’s death.  His reign was marked by political and social changes that had lasting influence on Europe throughout the Middle Ages.
December 4, 1980 The rock group Led Zeppelin announced it was disbanding after the death in September of drummer John Bonham. Go to article

Thomas Carlyle, essayist, b.1795.
Samuel Butler, writer, b. 1835.
Rainer Maria Rilke, poet, b. 1875.

Queen Bey is officially the GOAT
Beyoncé has been named the greatest pop star of the 21st century by Billboard, ahead of Taylor Swift at No. 2 and Rihanna in third. Billboard based the decision “on her full 25 years of influence, impact, evolution.”

Drone image of young sharks hunting fish wins photo competition
See the striking image of fish being attacked by sharks in the shallow waters of the Maldives, which has claimed the top prize in this year’s Royal Society Publishing Photography Competition.

Ed Sheeran will be first-ever Western artist to perform in Bhutan
The Grammy-winning musician will perform in the landlocked Buddhist monarchy of about 700,000 people located between China and India.

James Webb Space Telescope smashes its own record to find the earliest galaxies that ever existed
James Webb Space Telescope image of the stellar nursery N79 in the Large Magellanic Cloud, a satellite galaxy of the Milky Way. Read More.

5,000-year-old artifacts in Iraq hint at mysterious collapse of one of the world’s 1st governments
Newly analyzed 5,000-year-old clay bowls unearthed in Iraq may be evidence of early government-like rule, a new study finds. Read More.

1,600-year-old burials in Crimea hold gold and silver jewelry from ‘rich women’
Researchers say the finds are from aristocratic burials between the fourth and sixth centuries.  Full Story: Live Science (12/3)

Scientists reveal ‘neural tourniquet’ that can stop bleeding with nerve stimulation
Researchers stimulated the vagus nerve in healthy volunteers and showed it triggered blood clot formation, which they say could be used to prevent blood loss after surgery. Read More.

Future wearable devices could draw power through your body using background 6G cellphone signals. Read More.

PHOTOS OF THE DAY

Salisbury, United Kingdom
Head verger Esther Lycett looks up at Salisbury Cathedral’s 28ft Christmas tree from Longleat Forest, after its installation inside the cathedral’s nave.
Photograph: Andrew Matthews/PA

Tower Bridge, with the Shard rising to the left and the skyscrapers of the City of London to the right
Photograph: Jason Hawkes

​​​​​​​Sjusjøen, Norway
‘A typical Norwegian hytte (cabin) on a cold winter night.’
Photograph: Lindy Margrethe Andersen
Market Closes for December 4, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1989, M. Danny Wall, head of the U.S. Office of Thrift Supervision, resigned as the top regulator of savings-and-loan institutions. The cost of bailing out the nation’s thrifts rose above $166 billion and charges of fraud swirled around Charles Keating’s Lincoln Savings & Loan. Writing in a Wall Street Journal op-ed, Wall said: “In hindsight, I would have done some things differently.”
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite advanced slightly to 25,641.18 in Toronto.
Shopify Inc. contributed the most to the index gain, increasing 1.4%.
Spin Master Corp. had the largest increase, rising 5.0%.
Today, 106 of 219 shares rose, while 109 fell; 7 of 11 sectors were higher, led by information technology stocks.
Insights
* This year, the index rose 22%, heading for the best year in at least 10 years
* This quarter, the index rose 6.8%
* The index advanced 26% in the past 52 weeks. The MSCI AC Americas Index gained 33% in the same period
* The S&P/TSX Composite is at its 52-week high and 27.4% above its low on Dec. 13, 2023
* The S&P/TSX Composite is up 0.6% in the past 5 days and rose 5.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.6 on a trailing basis and 17.7 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.7% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.04t
* 30-day price volatility fell to 8.36% compared with 8.39% in the previous session and the average of 8.45% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | 38.5391| 1.5| 9/1
Industrials | 25.0605| 0.8| 21/6
Financials | 10.6282| 0.1| 16/10
Utilities | 3.3917| 0.4| 9/6
Real Estate | 0.9643| 0.2| 9/9
Consumer Staples | 0.1164| 0.0| 5/5
Health Care | 0.0115| 0.0| 3/1
Communication Services | -2.4635| -0.4| 4/1
Materials | -13.4301| -0.4| 14/34
Consumer Discretionary | -14.6977| -1.7| 6/5
Energy | -42.6721| -1.0| 10/31
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Shopify | 18.3300| 1.4| 0.8| 54.7
Constellation Software | 11.8100| 1.8| 4.1| 44.1
Canadian Pacific Kansas | 6.4760| 0.9| -23.4| 2.4
National Bank of Canada | -12.8100| -3.8| 153.2| 34.0
Dollarama | -15.0600| -5.1| 172.7| 47.2
Canadian Natural Resources | -23.2700| -3.2| 231.6| 7.3
US
By Rita Nazareth
(Bloomberg) — Stocks hit all-time highs as Federal Reserve Chair Jerome Powell said the economy is in remarkably good shape.
The euro wavered as the French government fell after a no-confidence vote in Parliament.
A rally in big tech drove the S&P 500 to its 56th closing record in 2024.
The Nasdaq 100 climbed more than 1%.
Nvidia Corp. led a gauge of the “Magnificent Seven” mega caps higher, with the group’s surge this year approaching 65%.
Salesforce Inc. and Marvell Technology Inc. soared as their results boosted hopes both companies will keep benefiting from an industrywide boom in artificial intelligence.
Powell also said officials can afford to be cautious as they lower rates toward a neutral level — one that neither stimulates nor holds back the economy.
He spoke at the New York Times Deal Book Summit in New York.
“We view this as slightly hawkish — but stopping well short of challenging the market’s growing confidence that a December cut is the base case, which has been our view all along,” said Krishna Guha at  Evercore.
One of Powell’s favorite barometers of the economy — the Beige Book — showed economic activity increased slightly in November, and businesses grew more upbeat about demand prospects.
The S&P 500 rose 0.6%. The Nasdaq 100 climbed 1.2%.
The Dow Jones Industrial Average added 0.7%.
Treasury 10-year yields declined four basis points to 4.18%.
French bond futures held onto earlier gains after far-right leader Marine Le Pen joined a left-wing coalition to topple the government, setting the stage for further political wrangling that has weighed on the nation’s assets for months.
“The current market environment is clearly ‘risk-on’,” said Steve Sosnick at Interactive Brokers. “Yet the evidence shows that someone has been buying insurance against a 10% correction in the S&P 500, even though — or perhaps because — we haven’t seen one in months.”
The “cost to hedge” against a 10% correction is around the highest levels that we’ve seen in three years, he noted.
To George Smith at LPL Financial, momentum could continue for stocks as December has been a good month for market seasonals.
When studying the proportion of positive monthly returns since 1950, December often delivers the highest — around 74%.
Despite the seasonality, Smith doesn’t rule out the possibility of short-term weakness, especially as geopolitical threats have the potential to escalate.
Equities may also need to readjust to what may be a slower and shallower Fed rate-cutting cycle than markets are currently pricing in, he noted.
“We remain tactically bullish into year-end given the positive macro environment, earnings growth, and a Fed that remains supportive of markets,” wrote JPMorgan Chase & Co.’s Market Intelligence Team led by Andrew Tyler. “It is sensible to play the market’s momentum and see low pullback potential until mid-January,” they said.
To some technical analysts who watch and analyze price moves, and strategists that keep an eye on investor sentiment, the initial rumblings are starting to sound a lot like a stock market that has overheated.
A Bank of America Corp. indicator that tracks sell-side strategists’ average recommendations remains at its highest level since early 2022, in neutral territory, but much closer to a contrarian “sell” signal than a “buy.”
“Statistically (and paradoxically), the impact of 2024’s big gains has made the market look riskier for long-term investors, but potentially safer for near-term speculators,” the Leuthold Group’s Doug Ramsey wrote this week.
Leuthold’s major trend index (MTI) — which takes into account many different kinds of indicators — remains at a “high neutral,” but all of the indexes in the MTI closed last week with maximum-bullish readings.
All the short-term positioning, rally chasing and mechanical buying flow speaks to an attitude of just running with the market tide.
That doesn’t stop the potential for things to change when the calendar flips into 2025.
“To put it simply, and probably no one wants to hear it, but this is not a good set up — investors and speculators alike have been lulled into perma-bull paradise,” wrote Callum Thomas at Topdown Charts.
Investors have their hopes up for a Santa Claus rally, but a healthy dose of skepticism might be warranted after November’s stellar run-up, according to Callie Cox at Ritholtz Wealth Management.
“The bar for success is now a lot higher for an economy that may still be in flux,” Cox said. “Yields show that expectations have moved a lot over the past two months, yet we haven’t seen any sustained, clear momentum in economic data.  Expectations matter, and the job market is under a microscope.”
To Mark Hackett at Nationwide, the sustainability of the market rally will be dependent on the continued resilience of the consumer.
One of the best forecasters of consumer spending is the health of the job market.
“Markets continue to be driven by a combination of technical and fundamental factors,” Hackett noted. “The consistency of the rally is demoralizing to bears, creating a ‘virtuous circle’ where buying drives further buying. There are questions of sustainability into 2025 given elevated expectations and valuations, but that is unlikely to derail the near-term momentum.”
Appetite for equities has shown no sign of abating this year.
The S&P 500 made multiple record highs, surging over 25%, powered by technology shares and a broad preference for US assets.
The rally extended after the election of Donald Trump raised hopes of tax cuts and deregulation.
While American equities have persistently outpaced their global peers, BlackRock Investment Institute says that could continue.
The US benefits more from “mega forces,” driving corporate earnings, the firm notes.
That is supported by a favorable growth outlook plus potential tax cuts and regulatory easing.
“Some valuation measures – whether price-to-earnings ratios or equity risk premiums – look rich relative to history.
But they may not tell the full story,” according to BII. “Comparing today’s index to that of the past is like comparing apples to oranges. Plus, valuations tend to matter more for returns over a long-term horizon than in the near term.”
BII says the AI mega force will likely benefit US stocks more and that’s why the firm stays overweight, particularly relative to global peers such as European stocks.
“The upshot: We are risk-on for now, but stay nimble. Key signposts for changing our view include any surge in long-term bond yields or an escalation in trade protectionism,” BII concluded.

Corporate Highlights:
* Dollar Tree Inc. sales improved in the third quarter, a sign the discounter is making headway in fending off competition and drawing in more shoppers.
* Foot Locker Inc. cut its full-year sales and profit forecasts, citing more discounts and a pullback in consumer spending ahead of the crucial holiday season.
* JetBlue Airways Corp. boosted its forecast for fourth-quarter results, citing higher-than-expected bookings in November and December as well as lower costs tied in part to falling fuel prices.
* Brian Thompson, a longtime UnitedHealth Group Inc. executive, was fatally shot in midtown Manhattan early Wednesday morning in what authorities described as a targeted attack that sent reverberations across the city and corporate boardrooms globally.
* Eli Lilly & Co. said its weight-loss drug Zepbound outperformed rival Novo Nordisk A/S’s Wegovy in the first head-to-head trial of the two blockbusters.
* General Motors Co. will incur more than $5 billion in charges and write-downs tied to its troubled operations in China as the automaker tries to salvage its once-profitable business in the world’s largest car market.
* Royal Bank of Canada posted a sixth straight quarterly earnings beat, fueled by revenue gains across the company and a boost from its acquisition of HSBC Holdings Plc’s Canadian operations.
* Nippon Steel Corp. reiterated confidence that its $14.1 billion acquisition of United States Steel Corp. can be completed by year-end, even as the current and incoming US presidents oppose the takeover.

Key events this week:
* Eurozone retail sales, Thursday
* US initial jobless claims, Thursday
* Eurozone GDP, Friday
* US jobs report, consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.6% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.2%
* The Dow Jones Industrial Average rose 0.7%
* The MSCI World Index rose 0.5%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0512
* The British pound rose 0.2% to $1.2703
* The Japanese yen fell 0.6% to 150.52 per dollar
Cryptocurrencies
* Bitcoin rose 3.1% to $99,053.09
* Ether rose 7.5% to $3,887.06
Bonds
* The yield on 10-year Treasuries declined four basis points to 4.18%
* Germany’s 10-year yield was little changed at 2.06%
* Britain’s 10-year yield was little changed at 4.25%
Commodities
* West Texas Intermediate crude fell 1.6% to $68.85 a barrel
* Spot gold rose 0.2% to $2,649.93 an ounce

This story was produced with the assistance of Bloomberg Automation.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Life is short, art long, opportunity fleeting, experience treacherous, judgement difficult. –Hippocrates, c.460 BCE-370 BCE.

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Senior Investment Advisor

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
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